Nvidia's earnings could be noisy, but these bulls are still upbeat on the stock

By Emily Bary

Analysts are curious about potential shipment delays for the new Blackwell chip but see plenty of reason to cheer Nvidia's long-term opportunity

Nvidia Corp. has "one of the largest opportunity sets ahead," and its stock trades at a "reasonable multiple," according to Susquehanna analyst Chris Rolland in a note to clients on Tuesday.

But even though he has a positive rating on Nvidia shares (NVDA) and thinks the company's upcoming earnings report will once again be strong, he acknowledges the potential for some "near-term noise" or concerns surrounding the company's commentary.

That's as Wall Street wonders about a reported shipment delay for Nvidia's new Blackwell chip lineup. While Nvidia recently said that it didn't comment on rumors and that Blackwell production was still on track to ramp in the second half of the year, Rolland noted that Super Micro Computer Inc.'s (SMCI) chief executive "seemingly confirmed the Blackwell delay during that company's earnings call." Server maker Super Micro is a Nvidia partner.

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In Rolland's view, reports of shipment delays "deserve some explanation and reassurances around re-spin/renewed timetable." If the company were to delay its delivery timeline by a couple of months, "this would likely push initial GB200 revenues into 2025," he wrote, referring to a Grace Blackwell rack-scale offering.

Nvidia reports earnings next Wednesday afternoon. "In short, we expect another strong report but note elevated expectations into the print, with the narrative around the Blackwell ramp important to drive further upside in the stock," Rolland wrote.

Still, there are plenty of bullish signals, including that Super Micro's commentary indicated strong demand, which is expected to continue. And even if the Blackwell shipment timeline is pushed back, "improving supply and availability of Hopper [graphics processing units] (H100/H200) should help fill the void in the meantime," Rolland added, while sticking with his $160 target price.

Analysts have noted sustained strong interest in Nvidia's current Hopper chip lineup, despite enthusiasm for the new Blackwell family. Stifel's Ruben Roy, for instance, said he's gauged "positive" feedback on the Hopper series, while his conversations with industry players indicate that "potential delays [for Blackwell] are likely to be measured in months rather than quarters."

"Consequently, we are again expecting a beat/raise scenario for July results and October guidance," Roy wrote. "We are not expecting any meaningful change in tone or messaging relative to what [Nvidia] has focused on since the company reported its [fiscal first-quarter] results, i.e. the company's longer-term road map and continued investment in organic and collaborative software offerings."

He rates the stock a buy with a $165 target price.

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Oppenheimer's Rick Schafer weighed in on the company's earnings and outlook as well on Tuesday morning, saying that he expects a "low-volume ... market introduction" for the Blackwell B100 product in the January quarter, before a "meaningful ramp" begins in the April quarter.

Nvidia's "entrenched [data-center] AI ecosystem is core to [generative AI] adoption," he wrote. "We remain long-term buyers."

Schafer called the company "the purest scale play on AI proliferation" while writing positively of the company's rack-scale efforts. The "move to rack-scale leverages [Nvidia's] unique end-to-end software connectivity accelerator platform," he said.

He rates the stock at outperform with a $150 price target.

Nvidia shares fell 0.9% in morning trading Tuesday. That puts them in danger of snapping a six-session win streak, which is so far the longest such streak since the six-day stretch that ended on March 25. The stock has shot up 24.1% over the previous six sessions.

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-Emily Bary

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08-20-24 0950ET

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